The acquisition of Gnip by Twitter signals the maturation of the social media industry. Like other, more established industries have done, social media is integrating its supply chain. What better way for that industry to control the end-to-end flow of product (in this case, data) and its associated revenue streams?
As a young company, Twitter had to focus on its core competency: building and growing a high throughput and reliable messaging infrastructure. Therefore, Twitter relied on an open API and an ecosystem of partners to develop and deploy the other tools that enabled adoption. Consolidation started with client software as the first target, with Twitter’s acquisition of TweetDeck in 2011 and the subsequent restrictions imposed both on access to the API and on the relevance and completeness of data delivered by this API.
Now, with the acquisition of Gnip, Twitter is targeting the "fire hose" the full feed of Twitter data sold to vendors, who in turn sell measurement and marketing based on social media.
It is probably worth recalling who owns the unlimited distribution rights to your tweets (and to mine). You don’t, I don’t. Twitter does. Sure, the content is yours (or mine), and you (or I) can distribute it, too but only via the Twitter API. (See Doug Laney’s post "Twitter’s Secret Nest Egg is in Plain Sight" for more clarification on this matter.)
Like Facebook, Snapchat and LinkedIn, Twitter knows a lot about us. In my case, it knows where I am, which airline I am flying (or bickering about), which conference session I am attending, which publication I just read, and in which high regard I hold striking air traffic controllers or cab drivers. And I am more of the discreet type
Twitter also detects major events, such as earthquakes or floods, before satellite photos become available. It will probably detect pandemics before health authorities (despite Google Flu’s recent demise). Some traders have used Twitter to predict stock trends, with astounding accuracy. And although tweeting-and-driving is not a good idea, Twitter undoubtedly has a pretty accurate view of traffic jams on many major highways.
Combine these two angles in-depth understanding of individual behavior and detection of global patterns and you most likely have the future Twitter business model. Of course, Twitter has been dabbling into targeted advertising and has generated some revenue from their fire-hose licensing. But industry observers have wondered how far this could take them.
Controlling the end-to-end supply chain is essential for Twitter to leverage its data assets to the fullest extent. Data monetization is the name of the game, and Twitter is moving full steam ahead.
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